US: analyst disputes recovery, says sales are just now rebounding

Itay Michaeli, an automotive analyst for Citi Investment, offered an assonant view of the US auto industry.

On average, automotive sales have rebounded 10% annually every year for the last four years and have increased from a low of about 10.5 million in 2009 to 15.6 million. That robust recovery has been celebrated in the automotive industry, and most automotive executives said they believe sales will continue to increase to more than 16.3 million this year.

“Despite all you have read about the strength of auto sales … we are just coming back to where we were before the recession,” Michaeli said in Detroit at the Automotive News World Congress.

Michaeli said that under normal circumstances automotive sales would rebound even faster. However, the average age of cars on the road has increased because of improvements to vehicle reliability. That means Americans are holding onto cars for a longer period of time. Michaeli estimates that automotive sales already would have surpassed 17 million if Americans had purchased new cars at the same rate as they historically did.

Still, Michaeli estimates that sales of new cars and trucks in the US will increase to about 16.4 million this year and will exceed 17 million next year.